创业公司的“物理定律”为何改变｜Ben Horowitz 访谈

When Ben Horowitz and his partner Marc Andreessen came into the venture capital industry, it was very different than it is today. You can argue that it is them, more than almost anyone else, who have reshaped this industry and matured it so much ever since. Andreessen Horowitz has become one of the most important institutions—not just investors, but institutions—in the private investing landscape, having achieved a scale that no one thought was possible in venture, which was always supposed to be this small, tiny niche corner of the world.

This conversation is a bit unique relative to some of the other ones that Ben has had more recently. I tried to understand the shaping forces and influences in his life and the ways that he thinks America most needs to change. He's taken this as his life's mission: to build a firm that affects outcomes in the country, not just in a small, niche part of the market, but very broadly. We even discuss his work with the Las Vegas Metropolitan Police Department, which he's tried to infuse with technology to lower crime rates across the system. I hope you enjoy this great and wide-ranging conversation with Ben Horowitz.

1. The US Tech Advantage

I think a fun place to begin, Ben, would be your take on the state of the country. What does it feel like to you in 2026? I know part of your mission is to directly impact the trajectory of the country. We'll talk about that a lot. But begin with this: what does the landscape, the playing field, look like to you today?

I think the tech sector is very, very healthy. America's competitiveness is very, very good. The entrepreneurship culture is outstanding, and that's the main thing I look at from my lens.

I go all over the world, and everybody wants Silicon Valley. How can we have Silicon Valley in the UK? How can we have it in France? They have a lot of the ingredients: great talent and great universities. They definitely have a worse regulatory environment—in the EU, an increasingly bad regulatory environment for entrepreneurship—but there's a cultural challenge. Succeeding, doing something larger than yourself, and making the world a better place aren't things that young people feel society values.

The likelihood of getting people to work for you and dedicate their lives to a mission like that, if you're building a company, is just not that great. Whereas in the US, it's amazing. I think the economy is in much better shape than people realize, and people are starting to see that.

2. A Solution for Everything

We've done a lot of things to stimulate it. We've got lower energy prices, much less regulation, and a more user-friendly tax code. That's all starting to kick in now. From our perspective, I think the bigger thing is AI. It's going to impact everything. There's almost no problem you can think of where you can't go, “Well, we have a real shot at solving that with AI.”

What were the big problems in the US? Auto deaths. Well, we've got an AI solution for that. Cancer—we have an AI solution for that. The fact that we've got a technology where we can address everything is a real new phenomenon, and I think all that's going to kick in in a fairly major way over the next 12 to 24 months.

Why do you think 12 to 24 months is a time frame worth mentioning—that some of this stuff will start to be felt more broadly?

It's all starting to take effect now, and it has to roll out and get deployed. Deployments of technology in particular have taken a long time in the past. You had to build out the infrastructure to do it. For cars, you needed things like roads and traffic lights and all that kind of thing. For the internet, you needed fiber in the ground, people to have smartphones, and you needed to do a lot just to get going.

The internet is here. If you want to use AI, if you want to apply it to your business, you just do it. There is no infrastructure that needs to be built to adopt the thing.

3. The Fragility of Success

What could most interrupt this good trajectory that America is on, where we are building solutions using technology? What are the biggest risks?

I think policy. One of the things my father said to me was, “Bad government, no matter how many smart people you have, no matter how great a culture you have, no matter how great the country is, can ruin the whole thing.”

Venezuela was the 4th-richest country in the world. Crazy. Then communism, and that's that. If you look at how little comes out of so many of these countries in Europe that have so many smart people—and then the ones that went into communism—there are so many genius Romanian entrepreneurs, John von Neumann, and the number of great genius scientists that came out of Hungary, this little country. Then it was just gone once the communists took over. It's completely like nothing, from inventing everything to nothing overnight.

I think that can absolutely happen here. We could outlaw AI. There were pretty aggressive proposals. The last Biden administration executive order said that you could not sell a GPU without federal government approval. That was a real executive order, and it got reversed. But we were that close to being basically out of the global chip game. It is fragile.

By the way, technology solutions work much better than policy solutions. That's the other thing. Policy solutions are very hard to make work. If you think about COVID, we could tell everybody to stay in their house. That has some extremely bad side effects, and it turned out not to work that well. Or we could invent a drug that cures it, or a vaccine that works. It's just hard to have a policy solution.

Look at all the policy stuff on climate change. Europe actually reduced emissions and all that, but it didn't do anything because China didn't reduce emissions. But if you build a really safe, efficient nuclear fission or nuclear fusion facility, that would have a big effect.

I think in general that's true. Defund the police did not make anybody safer; technology does. If you really want to change the world, if you really want to make it a better place, I think you can build a solution for darn near anything. If you want to change the world for the better, it's never been a better time to be an entrepreneur.

I was with a local restaurateur yesterday here in New York—one of the best—for a couple of hours, having him describe to us how he is planning on using AI tools to improve everything about his restaurant business.

4. The New Physics of Company Building

How do you think about the way all of this is changing the potentially large, attractive businesses that you want to invest in? Sticking with the restaurant example, Toast is a great company. There are many great companies that have been built in and around restaurant software businesses. It seems like this restaurant owner is going to be able to have his own spun-up operating system specific to him, and he's not going to need any of that stuff. How is this changing the way in which you view investment opportunities?

5. Inequality and the Kobe Bryant Effect

On the positive side, everything is up for grabs. I think people are overreacting to that in the stock market and so forth. If you look at existing software companies, people think, “Oh, they're all dead.” Well, some of these guys are extremely hard targets. It's not that easy to take out Salesforce or SAP. You would be surprised, even with AI, how much heavy lifting that is.

Having said that, it is true that a lot of these things—you can just make your own, you can do it yourself. It's going to be a lot easier. The number of possible interesting companies, I think, went up a lot.

I think the other thing we're seeing is these products work so much better than any technology products we've seen in the past, so revenue growth is much faster for these AI companies. There are many such cases of companies coming out. Cursor, which is ostensibly an IDE—what was the biggest IDE before Cursor? I don't know, but it wasn't big, and it took probably 12 or 15 years to get to that revenue level. Cursor went over $1 billion in revenue in no time. So that's super interesting.

I would say, though, from an investing standpoint, the laws of physics of company-building changed, which is going to, in effect, affect investing in what's currently, I would say, an unknown way. If you'd ever built a software company, the one thing you knew was that you cannot throw money at the problem.

Yeah. Yeah.

What's a man-year? Seven hundred IBMers before lunch. That phenomenon was kind of what everything was built on, because you knew that if somebody built a great product and it took them 3 years and they did it with a small team, Google wasn't going to hire 2,000 engineers and catch them. It was just not going to happen. That was a law of physics.

Now, if you have the data and you have enough GPUs, you can solve damn near anything. We've seen that with Elon catching the big models in no time. He just took a lot of money, a really good data center design, and some smart engineers. He's in the game. He got in the game very fast.

That would have never happened in the past. The markets also seem to be much, much, much bigger than anything we've ever seen.

So it would cause you to think about valuations and long-term value and other sorts of things in a different way than we have in the past. On the one hand, it's like, well, when you calculate the long-term value, what if this market wasn't $50 billion? What if it was $5 trillion? And then on the other end, well, what if somebody could catch you? These are just concepts we've not dealt with.

6. "Alchemistic" Talent

So how would the conversations feel different to me if I came in? You've got all these great investors working at Andreessen Horowitz. How does the nature of the conversation amongst your teammates, as they're debating this sort of stuff versus 4 years ago or something, feel most materially different internally?

I would say one of the most different things is when you look at AI researchers, it is really a different kind of thing. If you haven't been at Google, Facebook, OpenAI, or Anthropic, and somebody gave you hundreds of millions of dollars to try and build a giant model, and you weren't one of the main people, then you probably don't know how to do it because you can't learn it in school.

And you can't learn it in school because it's a little bit alchemistic in nature. It's a little bit of an art. So if you've never done it before, the chance of, on your very first try, building some kind of large model that's going to work well isn't that great.

Now, people are coming up to speed more. There are more companies, and people are learning it. But that's kind of how you got to this point, which from the outside world probably looked absolutely bananas: Why is somebody paying $100 million for an AI researcher or $1 billion for an AI researcher? That's the craziest thing I've ever heard. Well, what if there were only 40 of them in the world?

And you have a $4 trillion company.

Yeah, then it kind of changes the math on it a little bit. And I think that's sort of where we were, because it's kind of the first time we've had a need for a technologist that academia could produce. That's probably one of the bigger things that changed in the conversation: Who are all these people? We track all of them and know what they're doing, but it's very different.

Everyone talks in venture about the power law. The thing underneath the power law is a sort of inequality. It seems like so many of the things that are happening are just massive multipliers on the trend of inequality in every way: the billion-dollar researcher, the size of the biggest companies, and the wealth of the people creating those companies.

I would argue that inequality is a feature, not a bug, of the American system. I'm curious for you to riff on the nature of growing inequality and the good and the bad associated with that.

What's happening in AI is, I would just say, an extension of the Kobe Bryant effect. A basketball player, when James Naismith invented the game, had a limited amount of money they could make because they basically played the game in front of the people who could show up for the game, and that was it. That's the whole market.

Whereas once you add television and a global audience and these kinds of things, you can be LeBron James. You can become a billionaire, and that just was not at all possible before. I think we kind of first saw that with the internet, where, okay, now I can build a product and I can get to global distribution very fast. Then all of a sudden, I can become extremely rich.

AI is another layer on top of that. Now take that same product and make it just a more valuable thing, and whoever invents that is whatever the internet company was, plus-plus. That's going to make them even richer. That's the kind of bad part of it.

I think the good part of it is it's starting out day 1 completely democratized. AI—anybody gets access to very powerful AI. Anybody who has a phone—and now most people in the world at this point have smartphones—now you've got superintelligence in your phone.

So that's a big equalizer of opportunity in a lot of ways. I don't think we've ever seen a bigger opportunity equalizer than AI. Every child can have a super-advanced, amazing tutor or teacher. Great education is accessible to all now.

I think it's an equalizing technology, and there's some drive in inequality. This is another thing I learned from my father. He said, “Look, son, life isn't fair,” and that's extremely good advice because it's just not going to be fair. No matter what government or anything tries to do, it's not going to be fair.

And the problem is, if you create a system that tries to correct that, it doesn't make things more fair. It just transfers all the power to the person running the system. That's what happened with Stalin. That's what happened with Ceaușescu. That's what happened with Pol Pot. That's what happened with Mao. It's not an accident that every single system like that went bad, because it really ends up just being a power transfer.

When you think about, well, what do you want? You'd like everybody to have a chance. Don't give me no chance. Give me some chance. It may not be as big a chance as the other guy. It may not be a perfect chance. But if I have the desire, if I've got some capability, give me a chance to be something, to make my imprint on the world.

7. Automation History & The Future of Jobs

A system like that is going to end up with a lot of inequality. All systems end up with a lot of inequality, by the way. But you can try systematically to give everybody an opportunity, and I think AI does a really good job of that.

One of the memes that's very popular today is that you have a couple of years to get some capital or you're going to be a part of the permanent underclass. That's the phrase that is used on Twitter. I certainly agree that now everyone has the best lawyer, accountant, and adviser in their pocket, and that's amazing.

But what do you think about this notion that, because of that, we need less labor? It's going to be harder if you don't have some capital to begin with to accumulate capital and break in. I don't necessarily believe that. I'm just curious what you think about the challenges we'll face because of AI as a society.

Yeah, I don't really think that's right. I don't think the door is going to close behind you. I think the opportunities tend to multiply when you open up a new door and open up a new way of doing things.

We saw that with crypto. So many people who made money on crypto were people who literally didn't have much to start with. They just got into the technology early, and then they kind of parlayed it up.

If you have something that grows really fast, that's actually the opportunity for somebody with a little bit of capital to make a lot of money because it doesn't take much. If you bought Bitcoin for a nickel, you did really well. All you needed was a nickel. I think that's the nature of these things that go hyperbolic.

I also think the labor-market stuff—I think people are acting as though it's very predictable when it's not at all predictable. If you look at the history of the world and automation, this is what it is. It's a kind of automation technology. We've been automating things since the agricultural days.

In those days, I think 95% or 96% of all jobs in the US were in agriculture. Almost all those jobs have been eliminated. The jobs we have now, the people doing agriculture wouldn't even consider jobs.

The idea that we could imagine all the jobs that are going to come, sitting here, that AI is going to enable, I think is low. I think the need for more creative jobs is going to go way up, and the need for jobs to process work for the creatives will probably go down in some ways. But I'm not even sure about that.

We've had AI going—ImageNet was, what, 2012? And then natural-language stuff and BERT and all that was like 2015. Then ChatGPT was 2022. Where's all the job destruction? Why hasn't it happened yet? Why are you so sure it's going to happen next? And why are you so sure no jobs are going to be created? I don't think it's nearly as predictable as people are saying.

8. American Leadership in the AI Era

How would you describe the nature and scope of your ambition over the next 10 or 20 years?

One of the things that I learned—I had a mentor who was a great, great CEO by the name of Andy Grove. He was the CEO of Intel, and he famously did the major pivot out of the memory business into the microprocessor business. Maybe the greatest tech CEO we've had.

One of the things he said that, in a way, is very obvious but also profound is, if you're the leader in the industry, then the growth of the industry is dependent on you. It's up to you to expand the market; nobody else is going to do it.

When I think about the firm, I think of it in those terms. The reason America is America—and there are many narratives on this, but I think the factual one is—we won the Industrial Revolution. We really did. We had Henry Ford and Thomas Edison. We had great entrepreneurs, and they built great technology. The technology led to a military lead, which led to an economic lead, which led to cultural dominance. None of that was by accident.

Had we not had all those inventions, had all those companies, which led to everything from winning World War II, we just wouldn't be—we'd be some other thing. We wouldn't be America. So we're there again. This is the equivalent change of the Industrial Revolution in terms of how everything works: governments, societies, businesses. We're either going to be the leader of that technology, the provider of that technology, or we're not. If we're not, we're not going to be the economic superpower, the military superpower, the cultural influence, the standard of the world that we are now.

At least, I think that would be bad. I think America's been good for the world and good for giving people a chance, like we talked about before. Our role in that—trying to be humble with the role—is, from a policy standpoint, from a funding standpoint, and from a helping-people-build standpoint, to make sure that that next set of great companies comes out of America or allied nations. A core ambition is to do our part in helping that.

9. Andy Grove & High Output Management

I want to ask about some of the ingredients to do that. But just as a quick sidebar on Andy Grove, his book is incredible. Everyone should read High Output Management. What was it about—what very specifically did you learn from him? What did you see him do that impacted the way that you think or behave?

I'm so overly influenced by him, it's hard to even pin it down. I actually wrote the new foreword for High Output Management. I actually think that's the best thing I ever wrote—a foreword to High Output Management. It was my favorite book, and The Hard Thing About Hard Things was basically intended to be the updated version of it.

The thing in High Output Management that he did so well, that I tried to do my own version of, is that the concepts of management are easy. You need an eighth-grade education, maybe, to understand management. It's not like physics; it's pretty simple. But the psychological part of it is extremely difficult, particularly for a young person to be able to do.

It's super confrontational. You're having to look through the conversation you're having to the entire organization. You really have to be confrontational at times. The good of the whole supersedes the good of the individual. All these things are really complicated to do. His big influence on me was trying not only to absorb that, but then to tell it in a more up-to-date, modern way.

I went to visit him. He had this award on the wall that was literally Manager of the Year for the Santa Clara facility of Intel, and it was from, I don't know, 1992. I'm like, “Andy, you're the biggest CEO in the world. Why did they give you the Manager of the Year award for the Santa Clara facility?”

And he goes, “Oh, man.” He's like, “You know, Santa Clara was always scored the lowest—lowest quality scores, lowest 5S score on everything at Intel. So I was just like, ‘I'm going over there to talk to them.’”

He said, “I brought a roll of toilet paper and I put it under my desk, under my chair. And I said, ‘When are you going to get this facility up to code?’” They just started in with all this bullshit. I just reached under my chair and put the toilet paper up. I said, “Clean up your shit and tell me when the fuck you're going to be up to code.”

In 2 months, they were up to code, and they were always the highest-rated facility thereafter, just on that. So they gave me Manager of the Year for that.

10. The Hardest Part of Being a CEO

When did you first experience the lessons that drove his success—this confrontational, psychologically difficult aspect of management yourself? How would you encourage other people to get a taste of it? You can't just read about it, obviously.

What happens to founders is, you invent something, and now I've got to build a company. You don't know what you're doing, you make mistakes, and then those mistakes really cost the company. You lose confidence, and that leads you to hesitate. That hesitation is what causes the failure mode. Then either the company is indecisive, or founders get very open to input from their team and their executives.

But the team doesn't have the full context. Only the leaders have the context. So even if they're smarter than you, you still likely can have better judgment because you have all the knowledge. They defer, and if you defer to people who work for you, that creates a weird political situation because people jump into the vacuum: “You're not making the decision; I'll make the decision.” Then that feels political to everybody else. That's the pattern people run into.

You really have to build up enough confidence in them to have that confrontation. The hardest version of this, by the way, is the reorg. A reorg is basically redistributing power to make the company work better, to have communication be better, and to not have as much conflict.

But what's going to happen is somebody who's really good, who's been with you for a long time, is going to lose power, and they're going to be fucking pissed. If you compromise the organization so they can maintain their power, then you've just redistributed power from the people doing all the work to the executives, and that's a catastrophe.

It's always that kind of thing where people don't want to have that confrontation. They don't want to tell that person, “Look, the organization's here. You helped us get here, but you either have to be happy in this new role or it's going to be a wrap.”

When you're young and inexperienced, it's going to hurt to tell them that, but I don't know if it's going to help me to do this reorg because I'm not experienced enough to know that. I've never done that before, and so I'm going to go with the known—avoid hurt—to the theoretical avoid hurt. That's when you wreck your company. That's the pattern. I always do my best to lend them my experience on that.

You were lucky that when you started Andreessen Horowitz, you and Marc had both had tons of operating experience, both together.

Yeah. I still didn't know what I was doing as CEO.

Fair enough.

And he didn't know what he was doing either. His ideas now—if you ask Marc about management now, he's so different from how he actually did it. It actually makes him mad if you talk about it too much because he's like, “I got such bad advice. They told me to hire all these guys.”

How do you think he's most different? What would he say, or what do you observe, to be the most different?

I just think he's way more in control of himself. Marc is a super emotional person, and he's just way more in control of it than he was then, just in terms of his personality. He used to be zero or 100. He would be full of emotion, like, “What the fuck are we doing?” Or he just wasn't going to say anything—nothing in between.

Something I know the least about your firm is the first—I don't know what period of time: 3 days, 3 months, 3 years. I'd love to hear about how you thought about the business as it was getting started. Of course, I'm going to come back to what it is now and those ingredients you mentioned for having the impact you want to have.

11. Founding a16z

Silicon Valley and Wall Street are institutions that make America great. Lots of people listening have ambitions to do this sort of thing, and I'd love to hear the very, very early, primordial case study of what it was like, what kinds of conversations you were having, and what your initial ideas were.

Venture capital, first of all, you kind of have to understand the context of it. There hadn't really been new top-tier venture capital firms. The last one before we started that you would say was top-tier was probably Benchmark, which ostensibly started in 1995, but it didn't really, because all those guys came from another firm called Merrill Pickard.

That firm was from the '80s, and there hadn't really been a new one since the '80s. If you looked at why, every VC was kind of reputation-based. To be top-tier, you had to have invested in Apple and Cisco and Google and Yahoo and all the great companies, and you can't, from a standing start, get to that.

If you're not top-tier in VC, you're not going to last, because in a super-hot period everybody makes money. But the best entrepreneurs will only work with the top-tier firms, because that's how you're going to recruit great engineers, that's how you're going to get follow-on money—everything comes out of that. You'd never take money from a tier 2 if you could get it from tier 1, and so that's why the tier 1s always have better returns.

So we knew we had to be tier one, but we had that problem. The idea that we had was, well, venture capital is a great product for LPs, but it's not a great product for entrepreneurs. If we could build a better product for entrepreneurs, then we could win. That was the original framework.

The idea we had for the product for entrepreneurs was, because we had been entrepreneurs, around what you and I had been talking about: If you're a founder who wants to run your own company, you're not getting much. You need so much. You don't have the confidence, you don't have the knowledge, you don't have the know-how, and you don't have the network. What if we built a firm that was designed to give you enough confidence, power, network reach, and advice that you could actually be a CEO? That was the whole idea behind the firm originally.

The second idea we had was that VCs didn't ever market themselves at all because, if you're all based on your investing track record, it's best that it's just magic. Why say anything? Keep that a secret. They weren't talking, and when we went out and talked, everybody covered it. Everybody instantly knew we had this product.

Where did the germ of that specific idea come from? Let's be fairly loud relative to what others do from the very beginning.

It's funny because Marc and I were talking about it. He said to me, "Why don't VCs market?" The original thing went all the way back to the first class of VCs, which were the investment banking VCs: J.P. Morgan, Rothschild, Goldman Sachs, and so on. They were the ones financing these things.

It turned out that these guys were financing both sides of World War II, so they really didn't want any publicity because that would have been an extremely bad thing. To a large extent, that just carried over all the way through Arthur Rock and all these things. Then the reputation thing clicked in, and it was working, so there was no need to do it.

We got a lot of criticism when we did it. Our LPs would say, "The other VCs say you guys are egomaniacs. You named the firm after yourselves. You're marketing it like this."

It was so funny because the reason we named the firm after ourselves is that when we tried to raise money in 2009, which was right on the edge of the financial crisis, the big objection from LPs was, "You guys are really good entrepreneurs. You're just going to leave this thing and go build another company, and then we're going to be stuck with the fund." We couldn't get them off that.

Then I had the idea. I was like, "Why don't we just name it with our names? Then they know we're safe."

Yeah.

And that worked.

12. Scaling the Firm & Early Mistakes

If you think about the period of takeoff of the firm in 2009, up until you reached, let's call it, cruising altitude, when was cruising altitude, and what was the most difficult part about getting it from takeoff to that point?

The first thing is that we really didn't know that much about investing. Marc and I had done some angel investing, but neither of us had any venture capital experience. Credit to Sequoia, Greylock, Kleiner Perkins, and all the guys who were around at that time: They just had years and years of doing it.

We made more than our fair share of investing mistakes—missing things we should have done and doing things we shouldn't have done. Missing things that we should have done was probably the bigger one.

The other thing is that how we thought about the profile of the investor was wrong. We overindexed on the idea that we had to help the founder become a CEO, so we made it a requirement that you couldn't be an investor at Andreessen Horowitz if you hadn't founded or run a company. That was a very good attitude, set the culture of the firm in a lot of ways, and had good things that came from it.

I would just say that most CEOs aren't as interested in investing as they think they are. Also, most CEOs aren't as good at helping somebody else learn the job. Those 2 things ended up being not quite correct.

We made some adjustments. Fund 1 just went really well because we hit the scene hard. It was a small fund. We did Skype, Slack, Okta, and Stripe. There were just too many good things in a $300 million fund for that thing not to blow the doors off.

Fund 2 wasn't as good as Fund 1. By the time we got to Fund 3, that's when we had contention around, "We really don't have the right profile for the GP here." There was a while when we thought that was going to be a terrible fund. It ended up being a great fund because we had Coinbase, Databricks, Lyft, and GitHub. That one was scary for a while, but coming out of that, we knew what the firm needed to be.

I think it settled down after that. It wasn't such a startup anymore. It was like, "Okay, we got across that chasm."

The bigger thing was that we always had this idea about software eating the world, which Marc articulated really well in his 2011 piece, “Why Software Is Eating the World.” We always felt that venture capital firms needed to be able to scale, and that the other firms would have trouble scaling because of the way they worked and the way they shared control. That could be an opportunity for us, but we hadn't figured out how to do it yet.

Starting with the bio and crypto funds, I started to get to the organizational picture of how we would be able to address every market of technology with investing teams that weren't 20 people. That doesn't work. You need an investing team of 4 or 5 people, but you can't address the whole technology market with 5 people. You have to have multiple teams.

Having multiple teams in a venture capital firm was a little bit of a novel idea, particularly when each team has a platform that helps the founder build the company. We began it in earnest with the crypto fund, around 2018, and now the whole firm is organized that way.

13. Broken Capital Markets

If we zoom now to today and back to what you said, which is that the scope of your ambition is big: As the leader, you're the one helping to expand the market. What are the components of doing that? What does the system need that it doesn't currently have that you might be able to provide?

The capital markets have changed dramatically, with not much help. I went public at 18 months old with $2 million in trailing revenue. That wasn't a good idea. But companies used to go public routinely with $50 million in revenue. It was fine.

Now nobody's going public at $1 billion, right? You get to go public or something like that, and you're kind of small if you don't have that. You need a lot more out of the private markets than VCs are built to do, and that's one of the things we have to think about.

Another one is that companies in the portfolio used to leave you at $100 million in revenue, go public, and be off to the races. That's not true anymore. What do you need when you get to be $200 million or $300 million in revenue? You need to be multiproduct, multichannel, and multigeography.

As a venture firm, we need to help them, and as a venture industry, we need to help them do that. How do I get to Japan? How do I get to South America? Most venture firms don't provide much along those lines. We have to step up to those ideas if we're going to have companies in the portfolio at that stage.

Do you hope that, over time, your firm—and maybe some others like it that have become these big institutions in venture—go on to be sort of like the Blackstone or Apollo-type companies that are big, publicly traded, enduring businesses?

14. Why We Don't Do Private Equity

A big, huge wave among venture capitalists is private equity AI roll-ups. It's a good business idea, like a really good business idea. Just as the spreadsheet created the original private equity business, AI is creating a new private equity business where you can buy any existing company, optimize it with AI, and it'll be more valuable. That's a good idea. It's a good thing to invest in.

It's not something we're going to do for 2 reasons. One, it's the cultural opposite of who we are. We're about building new things, growth, and believing in the entrepreneur. Price doesn't even matter. As long as the thing succeeds, you're going to do well.

Private equity is like, entry price is key. I had a great dinner with Marc Rowan, who's a super genius and runs Apollo, and he was like, "Entry price, entry price, entry price." We never even think about that. We think about it, but it's not first and foremost at all.

Thinking about containing cost and this and that and the other, that's just not what a good venture capital frame of mind is. Culturally, I didn't want to mix those 2 things. More than that, I just didn't want to be in a business where the way you make money is you figure out how to optimize an existing thing and lay off people and that kind of thing.

We're about new technology companies building the future, taking things forward, and I'll leave that to the other smart guys in the industry.

What, if any, trade-offs feel like they might exist at this scale as you continue to scale and consider all these different people you're trying to serve—the investors internally, the LPs, the founders? So many people need to be served. Nothing's perfect. What are the trade-offs to the path that you've chosen?

15. Culture Is Action, Not Platitudes

I think with any scale of organization, you really have to overpay attention to culture, or the culture will drift. We probably do more work on that than any venture capital firm. I'm like, “You're not allowed to join unless you sign the culture document.” I spend an hour with every single employee teaching them the culture. It's that level of investment. We really try to enforce it hard when we can, and we have pretty good consistency, but that is hard to maintain as you grow.

Can you teach me more about culture? You've written a book about it. You've built cultures. You've studied some very interesting cultures that you wrote about in the book. If you had to teach a seminar on what a culture is in the first place, how to design one given what you do and who you are, and then how to make sure that people live by it, what would you say?

Let me give you a small but probably the most important insight, which is from Bushido, the way of the warrior from the samurai: a culture is not a set of ideas. It's a set of actions. If you define your culture as a set of ideas—integrity, do the right thing, we have each other's backs, or any kind of these ideas they call corporate values—it's actually just a bunch of bullshit platitudes. It doesn't mean anything.

The culture has to be defined in terms of the exact behavior that you want that supports that idea. What do you have to do to actually be that thing that you want to be? It's the little things. How responsive are you to your colleagues? What's the SLA on returning a Slack message or an email? Do you show up to meetings on time? Not everybody has those ideas, but if you want that idea, it's got to manifest through something else.

We have an idea that you have to respect the entrepreneur. What is that behavior? One, you can't ever be late to a meeting with an entrepreneur. I used to fine people $10 a minute in the beginning of the firm to reinforce it. You have to get back to an entrepreneur. If you say no, you have to say no. You have to explain why you're not investing, and it has to be clear. We're going to survey that entrepreneur after you say no to make sure that you said no and that they had a good experience. That's a behavior.

If you try to make yourself look good by making an entrepreneur look bad, you're fired. If you get on X and say, “Oh, he's selling dollars for 85 cents,” no, no, no, no, no, no. We're dream builders. We're not dream killers. Fuck that. Somebody wants to do something larger than themselves—build a company, make the world a better place—we're for that. We don't give a shit what the idea is, or if Sequoia funded them or whatever. We'd love that. That's who we are.

The behavior is the culture. It's the actual thing, and that gets you the idea, as opposed to starting with the idea and then figuring out how you're going to behave. That's probably the main thing on culture.

Can you say more about the influence your dad had on you? You mentioned that lesson of “nothing's fair,” or “life isn't fair.”

Yeah.

Tell me about your dad.

He was what's known as a red-diaper baby. My grandparents were communists. They went to secret meetings. They had cards. My grandfather was fired during the McCarthy era from being a junior high school teacher for being a communist.

My father grew up a communist. He started out on the left. He was editor of a very famous New Left magazine called Ramparts magazine, and he was involved with the Black Panthers, with Huey Newton and the Oakland chapter, and Eldridge Cleaver. He dropped out of politics and reemerged, I guess probably 8 years later, on the right.

He really understood the ills of communism and socialism, which helped me a lot. One of the things he said to me that always stuck with me was, “Son, go to the library. Pick any book on socialism. There are hundreds of books. In that book, I guarantee you, you will find page upon page, chapter upon chapter, of how to divide the wealth. You will not find a single sentence on how to create it, how to make it.”

I was like, “Oh, wow. That's not a very good system, is it?” I learned a lot about systems thinking from that, which ended up being, I'd say, very helpful to me as CEO.

He wasn't this New Age father. In the old days, your father wouldn't even talk to you until you got to be 12, and then you would get these little snippets of wisdom. One of the ones I actually put in The Hard Thing About Hard Things was when I had 3 kids and was young. I remember it was 102 degrees, the air conditioning was broken, and the kids were going crazy. One of them poured a whole gallon of apple juice into the rug. Apple juice was steaming out of the carpet.

I was just sitting there looking like I was going to die, and my father looked at me and said, “Son, you know what's cheap?” I said, “What?” He said, “Flowers. Flowers are cheap.” I said, “Okay.” He said, “You know what's expensive?” I said, “No, what?” He said, “Divorce.” He had been married 4 times, so he knew what he was talking about.

Yeah. As you look out today in the world, I'm curious what things are captivating you most and maybe even inspiring you. You have such an interesting perch. You get to see so much at the frontier.

16. Coding & Art

What's going on in coding now is quite phenomenal. We went through this period where, okay, AI can write code, cool. Okay, you can vibe-code stuff with a lot of security holes, fine. But I think over the break, over the winter break, it turned a corner where really good programmers were going, “Whoa—oh, God—this helps me.” I just became 100 times more productive.

I can't remember any kind of technology where, all of a sudden, you wake up and everything—the whole world—just changed like that. That's happening on a pretty regular basis, I would say.

We spent a bunch of time with people in Hollywood who are using AI. I think AI will help you make movies both better and at much lower cost, because you can shoot a scene and then have the AI do a variation of that scene. That's very, very good. If you're an actress, you have to shoot a scene 15 or 20 times or something. Wouldn't it be nice to shoot it 3 times, and then just take the pieces you like and make it what you want?

I think it's a little underestimated as a tool for creatives. I think that's true in music, too. I was a young person when hip-hop started, and the huge criticism was, “This is not music. They're just taking music and remixing it, and they're rapping over it, and it's a bunch of shit. It's a novelty.” But it was postmodern art, and I think we're going to get into postmodern art with what people will be able to do with AI and music.

That was one of the most exciting times in music. The invention of a new art form is when it gets really exciting.

What people in hip-hop—specific people—have had the largest impact on you personally, and how?

Nas is a very good friend of mine, and he's definitely had a big impact. The lens through which he sees the world is so different and interesting to me. We're both very big fans of Rakim, who is kind of the John Coltrane of rap.

17. Learning from Nas

Rakim's first big song was called “My Melody.” Nas and I were listening to “My Melody,” and the first line is, “Turn up the bass, check out my melody. Hand out a cigar, I'm letting knowledge be born. And my name's Rakim, not Eric B.” Nas puts it on, hands out a cigar, pauses it, and says, “Ben, why is he handing out a cigar?” I go, “I don't know why.” Then he plays the next line, “I'm letting knowledge be born,” and he's like, “It's a birth, Ben. He's passing out cigars at the birth of knowledge.” I was like, “Oh, shit. I listened to that song 1,000 times. I never heard that.”

I can't tell you how many times he sees or hears something that's there that I don't see. Having somebody I can talk to who has a completely different perspective on all things in life is amazing.

We did the Coinbase deal together, and he had called me about 2 weeks prior to us really seeing that because he wanted to learn about Bitcoin. I explained to him how it worked, and he was very interested. When I was talking to Chris Dixon, who was working on the deal, I was like, “Tell me about the guys.” He's like, “Well, one of them, Fred, is really into hip-hop.” I was like, “Okay.”

So I brought Nas over to my house.

There’s a boxing match on Saturday. I had Nas come over, and that’s how we got that deal. He’s just a big influence on me personally.

As a leader and a writer, storytelling is important to me, and I think he’s one of the great storytellers of all time—just a super genius at that.

Is there a CEO comparable to Nas? There’s this class of guys in the ’90s, like Jay-Z—“I’m not just a businessman; I’m a businessman.” These were massive franchises that got born, and these guys all became incredibly successful in the business world.

It felt more industrialized, almost, like the whole process, whereas with Nas, even just his album that just came out, it feels like Illmatic could have come out then or now. It has this weird, timeless quality. He still has that somehow. And like Premier, same thing.

Do you know anyone else like that in another domain? He seems like such a unique person relative to his peers.

Maybe Jensen Huang has this very defined view—agree with it or not—of who he is, what the company is, and so forth, that’s kind of gone across eras. But it’s still the same thing, right?

It’s not that it played in gaming, it played in Bitcoin, it plays in AI, but it’s still Nvidia. He never thought he had to change the name of the company. He’s gotten better over the years, but in a weird sense, it never felt like he’s trying to be current, which Nas never feels like either. Nas never feels like he’s trying to write a hit.

Can you tell the story of the work you’re doing with the Las Vegas Metropolitan Police Department? I’m asking about this one because it’s super interesting, but also because it feels like an interesting, different kind of example of what the application of this constellation of new technologies might allow for in terms of improvements and efficiencies. It’s just such an interesting case study.

A couple things about the Las Vegas Metropolitan Police Department were intriguing to me. The biggest one was that they were different from other police forces in the country because they’re a big metropolitan area that’s not run by the chief of police, but by the sheriff.

The reason that’s important is that the sheriff is an elected official and does not report to the mayor. So they never got caught in the big political movement to defund the police, and they were one of the only cities that didn’t reduce the police budget or anything like that. They stayed intact.

18. Las Vegas: The Future of Tech-Enabled Policing

They’re also, interestingly, one of the only ones that I knew of that never militarized, and they do community policing. You can see it in the numbers. The murder-clearance rate in Las Vegas is the highest murder-clearance rate, meaning they solve the murder 94% of the time.

I think San Francisco is around 75%, Chicago’s in the 30s, and the national average is below 60%.

I asked him, “Why is your murder-clearance rate so high?” The sheriff, Kevin McMahill, said, “Ben, when somebody is murdered, there’s always somebody who knows who did it. They just don’t talk to the police. But they talk to us because we’re part of the community. They know us.”

I thought, “Wow, that’s a great environment to see if this new technology worked.” I knew about all the public-safety technology because we invested in it through American Dynamism. I said, “Look, we’re going to become the highest-tech police force in America, hopefully the world, and I’m just going to fund it.”

We’ve got a drone program, Prepared 911, and Flock Safety AI cameras. If a 911 call comes in or a gunshot goes off, there will be a drone deployed there within 90 seconds. That drone video feed will be on every police officer’s phone in the vicinity instantly.

Since we started the program, I think crime is down over 50%, and police shootings of suspects are down close to 75%. Everybody’s safer.

I think this was the most surprising thing to me about the technology deployment. When you talk to the police, they say, “Look, the problem is the descriptions, because they cause half the violent confrontations.”

I’m like, “What do you mean?” Somebody jacks a car. There’s a baby in the back seat. We get a description of the car: it’s a blue 2004 Hyundai. Well, it’s really a green 2008 Hyundai. But we pull a guy over in a blue 2004 Hyundai, and that person has had bad experiences with the police. Now he’s got a gun in the car, and all of a sudden we’ve got an incident. An innocent citizen gets harmed, or a police officer gets shot.

With an AI camera, we know that’s the car. That’s it. We know there’s a baby in the car, so we’re not sending 1 guy with a gun to see if that’s the guy. We’re sending a whole squad, and we’re apprehending them safely.

Everything about policing is inherently dangerous, but intelligence makes it dramatically safer. I’m a huge believer in this technology for making everybody safer—suspects, criminals, citizens, police, everybody.

The other knock-on effect is that it’s put the pride back into policing. We used to have a big problem in Vegas where, because nobody wanted to be a police officer, we were lowering the standard. But now the standard is really high.

Between the drone center, which is super state-of-the-art, and these Cybertrucks that look amazingly futuristic and cool driving around, everybody wants to be a police officer now. Las Vegas happens to have the highest concentration of veterans in the country, so there are plenty of super-qualified people to choose from. They all want to be police officers. That’s all gone really well.

The last question I ask everyone is the same: What is the kindest thing that anyone’s ever done for you?

A mentor of mine, a fellow by the name of Ken Coleman, was a big executive at Silicon Graphics. When I was a sophomore in college, I got an introduction to him, and he gave me a job as a summer intern.

Without that job, I don’t know that I ever get to Silicon Valley or that whole thing. I would say that was probably the highest impact. He didn’t have to do that, and not everybody would have done that for me.

It may interest you that that is the most common form of answer across 500 of these: someone who took a bet when they didn’t need to.

Ben, it’s a pleasure to finally do this with you after a couple years of watching you and learning from you. Thank you so much for your time.

Thank you, Patrick. It was fun.